Abroad NGOs are treated like any other business organization. Their accounts are audited and they even pay taxes (although at a very low rate and govt grants exceed the taxes paid). However in India most NGOs don’t audit their account. They might have assets worth millions of rupees, yet instead of a finance controller, there will be part time clerk who voluntarily (or at marginal salary) would update the ledger over the weekend.
Very few of the NGO’s in the country are self sustaining. Also even amongst those who are self-sustaining often require capex support whenever they want to expand their operations. There are Indian nationals, Govt of India, NRI or even foreign agencies which are more than willing to support these NGO in their noble causes. However if you take someone’s money, then it is expected that
a. You prove that you need the money
b. You have spend wisely whatever you have received
c. Share the results of the actions.
Unless all the above 3 are taken care of, the donor will not feel proud of his donation. It makes financial sense for the NGO also because a satisfied donor will not only repeatedly fund your cause, but will also promote and solicit funds from his/her friends.
The problem in India is that NGOs in India have evolved from the Trusts which the rich use to lessen their tax burden (both personal tax and wealth tax). Via inflated/fake bills the trustees used the trusts to fund their lavish lifestyle. I have known families were almost every member is on the board of different trust and they use it as an expense account to bill almost anything and everything to these trusts.
e-Nagar
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